How AI is changing Stock Trading: Tools Every Investor Should Use
Are you stalking your stock market terminal 24/7? Or maybe searching for the trend for the most profitable deal? Well, it’s time to say goodbye to all hazards. Artificial Intelligence has taken up the space, while humans can engage in wiser jobs. AI can analyse the vast dataset patterns, accuracy, speed and efficiency of the financial market. Managing the human bias and risks and automating the tasks can lead to better strategic decision-making. AI in stock trading has taken a role and will enhance further in the future.
How does AI affect stock trading?
Quantitative trading: This kind of trading uses quantitative modelling to analyse the price and volume of stock trading. There are advanced capabilities, and hence investors use this kind of trading to complete major transactions involving thousands of shares. The advantage of quantitative trading is that it allows for minimal data usage and eliminates any emotional decisions during trading. Suppose an investor believes in momentum investing; the process of quantitative analysis will pick the best stocks during an upward momentum.
High frequency trading: This phenomenon occurs when a larger quantity of shares is being bought and sold at the same time. The high-powered computer can detect it easily and analyse the market simultaneously. This will motivate the investors to have a competitive edge. High-frequency trading increases competition in the market as the trades occur faster and the volume increases. The risks of trading can be mitigated with several strategies, and one of them is a stop-loss order. This ensures the trader’s position is closed at a specific point and can prevent further losses in the future.
Algorithmic trading: Algorithmic trading occurs when investors start using algorithms and make decisions based on historical data. This process supports the execution of trading decisions. They apply machine learning and deep learning for analysing market data and financial news. This process involves rules based on computational formulas and trade execution. They use complex mathematical models and enable the firm to make a decision within seconds. Algorithmic trading is used for arbitrage, order execution, and also processing trend trading strategies.
Arbitrage trading: This theory works in the case of financial institutions, especially in the case of short-lived variations in financial trading. Arbitrage trading is done in stocks, commodities and currencies. Arbitrage ensures that the market values do not deviate, especially from fair value, over a longer period. Any inefficient price settings are treated, and the opportunity is eliminated in several seconds. You can buy and sell a similar product or asset at a different price; this means there will be a risk-free profit.
Automated trading: This process is about participating in the financial market with the help of a programme that is based on any predetermined entry or exit. You can combine technical analysis with parameters like opening orders, trailing stops, and guaranteed stops. Auto trading refers to the process of trading many things at the same time. Some rules of the trade are already built into the parameters set according to you. The motto is to execute trade faster and efficiently by taking advantage of some specific and technical events.
What are the tools that investors should use in 2025 for analysing stocks?
Let’s look at the AI tools that investors can use to analyse the market better.
Trade Ideas: Trade Idea Technology is a platform trusted by brokers. The technology is used by the traders to gain an advantage and know the profitable stocks in line. This platform combines artificial intelligence, real-time analysis, and automation to streamline decision-making and execution. The key technological features used here are:
Holly AI is the virtual trade assistant here delivering real-time buy and sell signals and back-testing trading strategies. There are some precise entry and exit points without any user configuration.
Money machine is the second-generation AI used here to determine the momentum of the stocks and adjust positions dynamically.
Trade wave offers adaptive AI that analyses market data for real-time entry and exit signals.
This platform utilises backtesting and simulated trading against historical data. They help traders refine strategies without risking their real capital.
Tickeron: This is a web-based financial technology platform leveraging Artificial Intelligence to provide trading tools, portfolio management, and market analysis.
The key features of Tickeron are:
They offer a range of AI-powered trading bots known as AI trading agents, categorised as signal agents, virtual agents, and broking agents.
AI algorithms scan various markets, including stocks, ETFs, and cryptocurrencies, to identify chat patterns.
Portfolio management tools include AI portfolio optimisation that helps build and manage a diversified portfolio.
There are educational resources that provide tutorials, videos, and seminars covering topics on technical analysis and quantitative strategies.
Sentimental Investor: This is a tool/ software or analytical platform measuring market sentiment. This will measure the specific emotional tone of the market/investors towards an asset. They would try to identify the investor mood, irrespective of whether it’s bullish or bearish. The key features are:
These tools analyse data from various sources and determine if the market is going the bullish or bearish way.
These tools are used to track the sentiment over time. They help the investors identify the potential trends in the market.
The investors are provided with data-driven insights; they help to understand the market better.
After understanding the market sentiment, the investors will identify the investment opportunities.
Why is technology necessary for stock market trading?
Stock market inherently depends on technology for a better analysis. Due to technological innovations, the stock market can easily be digitised and make a new paradigm in the financial market. The factors that have aggravated technological innovations are mainly:
Speed and efficiency of analysing and assessing big data lowers the trading cost and manual intervention.
There are robo-advisors dedicated to the new frontier of wealth management. Those having a small amount turn to capital due to having lower costs and higher diversification.
Blockchain technology and crypto trading opened up a new dimension in digital investing. The returns are huge, and losses are lower as the money doesn’t suffer from inflation or depreciation.
Handling a bigger amount of data is better possible for AI-powered tools rather than humans. The possibility of making errors is lessened, anyway.
Stock trading can be lucrative when you monitor the trend with AI-powered tools. Investors found this could be a better option since it supports better analysis of bigger data and machine-driven decision-making capacity. So, if you are trading stocks, it’s time for you to shift to AI-driven decisions and AI tools for investors.
Sweta Chakraborty is an Amazon author and SEO content writer. She contributes articles, blogs related to finance, stock market, cryptocurrency and real estates.